Is Sheryl Sandberg Leaning Out at Facebook?

06.14.13 10:49 AM ET

About 66 minutes into Facebook’s annual shareholder meeting earlier this week, a stockowner stood up and posed a question to Sheryl Sandberg, the company’s long-serving chief operating officer who this spring penned a best-selling book, Lean In, and then created a nonprofit group, Leanin.org to promote women in the workplace.

“You wrote a great book in the last year, spent a lot of time promoting it, traveling around. I’m sure it did a lot of positive things for Facebook’s ability to attract people.” He said. “However, my concern is that took a lot of time and activity in addition to your substantial responsibilities as COO of Facebook. How can you assure me that you’ll be just as committed to Facebook over the next 12 months as you were the previous four or five years? Because without you there is no business in Facebook.”

“I love my job at Facebook,” Sandberg said. “Facebook has been and remains my number one priority. I also have no plans to leave.”

That exchange really encapsulates the dilemma Sandberg is in, and the extremely rare place she occupies in America’s corporate culture. No, it’s not that she’s a senior woman in Silicon Valley; the CEOs of tech giants Yahoo! and HP are women, after all. Rather, it’s that she’s one of the nation’s few rock-star chief operating officers.

Quick. Name a chief operating officer of a major company. COO is the ultimate non-glamorous job. Aside from missing a letter that CEOs have in their title, COOs lack the juice they have. They’re the vice presidents to the presidents, the inside men to the CEO’s outside men, the Scottie Pippen to the CEO’s Michael Jordan. CEOs are supposed to be the charismatic visionaries. The chief operating officer is supposed to deal, quietly and competently, with the annoying stuff—personnel, overseeing the core business, making sure the trains run on time. It’s a huge job, and a vitally important one. A COO’s successful labor frees up the CEO to think deep thoughts, write books, and hold forth at Davos or on the Charlie Rose show about vital global issues.

COOs rarely think deep thoughts of their own, or write books, or hold forth at Davos or on the Charlie Rose show about vital global issues. But of course, Sandberg, 43, has done all of the above in the past year. Her best-selling memoir/advice book, Lean In, has made her a popular culture phenomenon. This spring, Google Trends showed that Sandberg briefly eclipsed Facebook CEO Mark Zuckerberg as a more popular search term. Her useful effort to get women to advocate for themselves and one another clearly has legs beyond Barnes & Noble and Amazon.com.

But as Sandberg’s stock in the world at large has risen, Facebook’s stock has slumped. The narrative surrounding Facebook has changed, and so too has some of the narrative surrounding Sandberg. As impressive as it was as a private company, gaining massive scale from nothing in its first several years, Facebook has been something of a fail as a public company. The company’s senior management (including Sandberg), with some help from its investment bankers, botched last year’s initial public offering. The company’s stock, priced too high at $38, fell almost immediately, and trades about 40 percent below the offering price. This, in a period in which the stock market has broadly risen. As one shareholder impertinently noted, while Google’s stock has never closed at a price lower than its IPO price, and that Facebook has never closed at a price higher than its IPO price. Below is a chart of Facebook, Google, and S&P 500 in the past year.

The stock market is famously a futures market. And it is judging Facebook not on its ability to hoover up billions of users, but to create a business where revenue reliably rises more rapidly than expenses. That, of course, is the task of the chief operating officer. And Facebook isn’t doing that well in this regard. The internet is a great place to grow a social media company, but a tough place to run it for operating profits. As the company’s earnings release shows, 2013 first quarter revenue rose 37.8 percent from 2012. But reported earnings were up less than 4 percent, in part because costs and expenses rose 60 percent. Facebook still sports healthy profits margins. But selling display advertisements on websites, and especially on tiny mobile screens, is a difficult chore. And the company faces a long, hard slog to get back to its valuation of a year ago.

Sandberg is a long way from stuck. But she has been in her position since March 2008, which is an eternity in tech terms. Consider that when she started the job, George Bush was president, and Instagram and Tumblr didn’t exist. There’s no real path upward for her at Facebook, since Zuckerberg isn’t going anywhere. And she may be ceding her title as the most powerful woman in tech. Yahoo! last year brought in Marissa Mayer, who has engineered an impressive turnaround in the company’s stock and perception. (It’s worth $27 billion.) At Hewlett-Packard (market capitalization: $48 billion), Meg Whitman is cleaning up the mess left by a series of short-term CEOs. Meanwhile, as someone with political ambitions, she has to know when President Obama was her age, he ran successfully for Senate. And while nobody should shed a tear, she’s less wealthy than she was a year ago. According to the proxy, Sandberg owns about 17.8 million shares of the company, worth about $426 million at current market prices.

At the meeting, Mark Zuckerberg rubbished the notion that Sandberg was using Lean In as a way of leaning out. “I think Sheryl is going to be here for awhile.” And there’s no evidence to suggest she has a foot out the door. But as the guy who invented Facebook should know, status updates are prone to change.